SAN LEANDRO, CA—On the national development front, there is 215.6 million square feet of industrial product under construction. Although development remains strongest in major industrial markets, port cities and primary inland distribution hubs, nearly half of US markets currently have more than 1 million square feet under construction, according to Cushman & Wakefield research.
Moreover, there was 232.9 million square feet of industrial product delivered in 2016, with 73.6 million square feet of it being delivered in the fourth quarter. Typically such a robust development pipeline would rebalance supply and demand fundamentals, and elevate vacancy, but these are not typical times. Ecommerce continues to structurally alter supply chains and drive robust levels of leasing that continue to keep pace with deliveries, GlobeSt.com learns.
Among the tightest markets in terms of overall vacancy include Los Angeles at 1.4%, Orange County at 2%, East Bay/Oakland at 2.9% and Nashville at 2.9%. In the East Bay market where very few sites of any magnitude are available, the 880 corridor recently snagged a large industrial project. Trammell Crow Company has been appointed by long-time partner, Principal Real Estate Investors, to serve as the master developer of San Leandro Business Center.
This speculative class-A industrial project sits on a 30.61-acre site, one of the largest development sites in the area. The project will include three class-A industrial buildings totaling 553,200 square feet of high-tech manufacturing, assembly and distribution space. Construction is expected to begin the second quarter of 2017 and complete in the third quarter of 2018.
The site is home to the 1950s-built, 328,000-square-foot former Kraft Foods plant. Closed late last year, the facility made Tang, Kool-Aid and a number of coffee and tea brands, such as Maxwell House, Gevalia and Yuban. A historical look back shows that the Kraft and Heinz merger in 2015 was the result of a decision to consolidate manufacturing across the Kraft-Heinz North American network, and included 2,500 layoffs. Company officials promptly began cost-cutting measures that mirrored Heinz's 2013 acquisition by Berkshire Hathaway and 3G Capital.
“Very few projects of scale in this supply-constrained submarket are even possible,” said Parker Larson, senior associate with Trammell Crow's Northern California business unit. “We have created a vision for the site that we believe meets demand. We are excited to be working with Principal again on a unique interior Bay Area project.”
The CBRE Oakland team of Michael Barry and Robert Ferraro represented seller in the transaction. Additionally, the team will serve as the leasing agents for the project.
“East Bay investment opportunities as well located as this site don't come around very often,” added Jeff Uittenbogaard, an investment director with Principal Real Estate Investors.
SAN LEANDRO, CA—On the national development front, there is 215.6 million square feet of industrial product under construction. Although development remains strongest in major industrial markets, port cities and primary inland distribution hubs, nearly half of US markets currently have more than 1 million square feet under construction, according to Cushman & Wakefield research.
Moreover, there was 232.9 million square feet of industrial product delivered in 2016, with 73.6 million square feet of it being delivered in the fourth quarter. Typically such a robust development pipeline would rebalance supply and demand fundamentals, and elevate vacancy, but these are not typical times. Ecommerce continues to structurally alter supply chains and drive robust levels of leasing that continue to keep pace with deliveries, GlobeSt.com learns.
Among the tightest markets in terms of overall vacancy include Los Angeles at 1.4%, Orange County at 2%, East Bay/Oakland at 2.9% and Nashville at 2.9%. In the East Bay market where very few sites of any magnitude are available, the 880 corridor recently snagged a large industrial project. Trammell Crow Company has been appointed by long-time partner, Principal Real Estate Investors, to serve as the master developer of San Leandro Business Center.
This speculative class-A industrial project sits on a 30.61-acre site, one of the largest development sites in the area. The project will include three class-A industrial buildings totaling 553,200 square feet of high-tech manufacturing, assembly and distribution space. Construction is expected to begin the second quarter of 2017 and complete in the third quarter of 2018.
The site is home to the 1950s-built, 328,000-square-foot former Kraft Foods plant. Closed late last year, the facility made Tang, Kool-Aid and a number of coffee and tea brands, such as Maxwell House, Gevalia and Yuban. A historical look back shows that the Kraft and Heinz merger in 2015 was the result of a decision to consolidate manufacturing across the Kraft-Heinz North American network, and included 2,500 layoffs. Company officials promptly began cost-cutting measures that mirrored Heinz's 2013 acquisition by
“Very few projects of scale in this supply-constrained submarket are even possible,” said Parker Larson, senior associate with Trammell Crow's Northern California business unit. “We have created a vision for the site that we believe meets demand. We are excited to be working with Principal again on a unique interior Bay Area project.”
The CBRE Oakland team of Michael Barry and Robert Ferraro represented seller in the transaction. Additionally, the team will serve as the leasing agents for the project.
“East Bay investment opportunities as well located as this site don't come around very often,” added Jeff Uittenbogaard, an investment director with Principal Real Estate Investors.
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